Gas tax, tolls go up Monday

MATT BUTTON | AEGIS STAFF / Patuxent Homestead

Starting Monday, people driving in Maryland will feel an extra pinch at the gas pump, as will residents throughout the state of Maryland as the Maryland General Assembly approved a phased-in tax earlier this year, with the first phase adding about 4 cents per gallon starting July 1.

Starting Monday, people driving in Maryland will feel an extra pinch at the gas pump, as will residents throughout the state of Maryland as the Maryland General Assembly approved a phased-in tax earlier this year, with the first phase adding about 4 cents per gallon starting July 1. (MATT BUTTON | AEGIS STAFF / Patuxent Homestead)

Come Monday, driving around Maryland will cost more — both at the gas pump and the toll plaza.

Marylanders will see a 3.5 cent rise in the state's gas tax — the first such increase in two decades — as well as toll rates that jump as much as 50 percent.

The changes that take effect July 1 concern some residents. Trucking company president Tom Huseman is measuring the impact of both increases in thousands of dollars. Joseph L. DiBlasio of Essex is adjusting his commute to avoid the higher toll at the Fort McHenry Tunnel.

And Andrew Langer, who commutes from the Eastern Shore to Washington, says the twin increases amount to piling on.

"There are ways to save money and do projects that don't require the double whammy of a tax hike and a toll hike on the same weekend," said Langer, a Centreville residentwho was sitting in a Bay Bridge backup as he spoke. He estimated that the increases would cost his family $450 a year.

"A dollar the state is forcing me to spend on them is a dollar I'm not spending on something of my own choosing," he said.

Area residents are seeing other taxes and fees rise as well. For example, customers will have to pay a tax of 5 cents, up from 2 cents, on most bottled beverages sold in Baltimore beginning Monday. Milk, juices and two-liter soft drinks areexempt.Local officials say the increase will generate about $10 milliona year to build new school facilities, but critics fear that city businesses will suffer as customers choose to buy beverages outside Baltimore.

Meanwhile, some localities have established new stormwater fees, but not all will take effect immediately. The General Assembly required 10 local governments, including Baltimore's, to set the fees by July 1 to combat runoff that pollutes the Chesapeake Bay.

Between September and October, Baltimore homeowners will be billed from $40 to $120 annually. Baltimore County mailed out bills this week; residents will pay $39 a year for a single-family home, $21 for a townhouse and $32 for a condo.

The gas tax and toll increases will have a much broader impact across the state.

The increase in Maryland's gas tax, which had been frozen at 23.5 cents a gallon since 1992, was part of a transportation revenue bill proposed by Gov. Martin O'Malley and passed by the General Assembly this year. Further scheduled increases could drive the tax up to more than 42 cents a gallon by 2016, raising money to jump-start the state's stalled transportation efforts.

This year's toll increases were set in motion in 2011, when the Maryland Transportation Authority voted to raise tolls in two phases — one that took effect that year and another delayed until this summer. Technically, the toll and the gas tax increases are separate matters. With a few exceptions, toll revenue is used to build and maintain toll facilities, while gas tax revenues pay for the state's other transportation needs.

Among those who will feel the most impact from the increases will be Maryland's truckers.

Huseman, president of Terminal Transportation Services in Baltimore, said his company will be affected more by the rise in tolls than the gas tax increase. He expects the company, which operates 65 trucks servicing the port of Baltimore, to see its annual toll costs — about $50,000 five years ago — rise to $180,000.

"It just puts [Maryland] in a very, very uncompetitive position with our neighboring states," he said. "My first reaction is accountability: What happened to the money?"

Huseman said he understands the need for increased transportation revenue but wishes the state had increased the general sales tax, rather than just fuel taxes, to "spread the pain" of paying for projects.

Reactions to the increases often focus on the governor.

As he pumped gas at an Exxon station in Anne Arundel County, MearnsFuller of Severna Park blamed O'Malley, whom he described as "a tax-and-spend kind of guy." Fuller said he doesn't mind the rise in tolls so much but doubts the gas tax increase was needed.

"Look at what the private sector is told to do: Do more with less," he said. State officials "could be doing more with what they have."

But at the next pump, Leslie Starr of Baltimore, an O'Malley fan with an Obama sticker on her hybrid car, said she's "proud to pay taxes for civilization." She said she's not wealthy but can afford to absorb the increases to help upgrade the state's infrastructure.

"You've got to do it. What's the point of saving money and having bridges collapsing?" she said.

The initial impact of the gas tax increase will be relatively modest for drivers of private vehicles. AAA estimates that the average Maryland motorist uses 47.6 gallons of gas a month, which translates to an added $1.66 in taxes monthly, or just under $20 a year.

The gas tax will increase in stages through mid-2016, when the state projects it will reach 42.5 cents a gallon — costing the average motorist just over $9 a month, or $110 a year, more than now. The increase could be reduced by 7 cents a gallon — leaving it at about 35.5 cents — if Congress passes a bill by 2015 allowing Maryland to collect taxes on Internet sales by companies such as Amazon.

However they feel about the gas tax increase, Marylanders are beginning to see some payoff from the increased revenue. When O'Malley signed the transportation bill May 16, he announced $1.2 billion in projects made possible by the new revenue.

They include an expansion of MARC Penn Line commuter train service to weekends, design money for light rail lines in Baltimore and the Washington suburbs, and seven major highway projects. They include a reconstruction of the Leeds Avenue interchange on the Beltway in Baltimore County and the widening of U.S. 29 in Howard County.

Two weeks later, when O'Malley named former Baltimore County Executive Jim Smith as state transportation secretary, he announced a $90 million project to widen the Beltway from U.S. 40 to Frederick Road — the type of congestion-relief work that had nearly ground to a halt in recent years.

"Every morning is a tie-up that goes all the way up to [Interstate] 795 in the Pikesville-Owings Mills area. And that is going to be remedied," Smith said.

Motorists will understand the need for the gas tax increase as more projects get started, he said.

"They're going to see — fairly quickly — what they're getting for their money. And that is just the start," Smith said. "One of my biggest challenges in this role will be to handle the pent-up demand for all the projects that have been in the queue."

While the gas tax increase was up to the discretion of the legislature, the 2011 decision to raise tolls was unavoidable, Smith said.

"It was required in order for us to maintain our systems and meet our safety standards as well as our maintenance agreements," he said. In addition, he said, the authority had an obligation to raise money to pay bondholders for the money it borrowed for two "mega-projects" — the $2.6 billion Inter-County Connector in the Washington suburbs and the $1 billion Express Toll Lanes project on I-95 northeast of Baltimore.

As a result of the toll increases, the cash cost each way of using any of the three Baltimore Harbor crossings will go from $3 to $4. The Susquehanna River crossings on I-95 and U.S. 40 will jump from $6 to $8— each collected northbound only. Tolls on the Bay Bridge and the U.S. 301 bridge over the Potomac, also collected in only one direction, will rise from $4 to $6.

Tolls on the ICC are not affected, because charges for using that road, which connects I-95 with I-270, are pegged to the level of traffic.

For DiBlasio, the toll increase means the difference between using the Fort McHenry Tunnel and navigating through city streets on his way to work at the University of Maryland's downtown campus. He said he turned in his E-Z Pass on Monday — and had a lot of company when he did so.

"It's not even worth the gas or the wear and tear on your car to take the tunnel anymore," said DiBlasio, a computer technician who estimated that the city route would add 10 minutes to his commute. The toll increase would have raised the cost of commuting for him and his wife, who is keeping her account, by about $60 a month, he said.

He wishes the authority had raised the tolls in regular intervals over the years rather than waiting and imposing two large increases in two years.

"I don't have time to adjust it for my budget," he said.

There is some good news for motorists. According to the transportation authority, no further increases are in its six-year-forecast.And taking effect the same day as the gas tax increase will be a law facilitating public-private partnerships — a method state leaders hope to use to build large infrastructure projects while minimizing future tax increases.

Ragina Averella, Maryland spokeswoman for AAA Mid-Atlantic,said that at least the gas tax increase isn't taking effect in the middle of a price spike. This week the average price per gallon of unleaded gasoline was hovering around $3.50, about where it was the month before.

"The only silver lining in the cloud is that gas prices are stable at this time and in fact should be declining if there are no major refining issues or supply issues," she said.

Pre-paid cell phones: It will cost 60 cents more each time customers buy more time for pre-paid cell phones; the fee helps pay for the emergency 911 system.

Baltimore schools: The city will be required to start making deposits into a fund to build or renovate about 40 city schools, the first phase of a $1 billion-plus plan. The city will put money from its increased bottle tax — which rose from 2 cents to 5 cents on most containers — into an account. When table games arrive at the planned Horseshoe Casino, the state will put revenue into the same account.

Gun backlog: The Maryland State Police's force will expand by 66 jobs, some of whom will help implement the gun law scheduled to take effect in October. Other new workers will help relieve the backlog of nearly 30,000 gun applications and the state police's current three-month delay in processing background checks for gun buyers.

Veterans benefits: New laws will help award college credit for military service and training, as well as expedite the process for getting professional licenses for veterans and their spouses who move to Maryland.

Boat tax cap: The excise tax for boat sales will be capped at a $15,000 tax bill, a measure aimed at persuading more yacht owners to keep expensive boats in Maryland.

Oyster shell tax credits: Residents and corporations can earn up to $750 in income tax credits by recycling oyster shells. Each bushel earns a $1 tax credit.